REC urges HMRC to set up a dedicated umbrella company hotline

In a recent press release, the Recruitment & Employment Confederation (REC) calls upon HMRC to set up a special hotline for workers to report non-compliant and unethical umbrella companies. The dedicated phone line is just one part of REC’s “four-point plan” to protect workers from unscrupulous tax avoidance schemes and non-compliance. Keep reading to find out more.

Umbrella companies have been around for many, many years, and most provide a compliant PAYE payroll service for temporary workers. However, in recent news, a few unethical umbrella companies have given the industry a bad name. For example, the BBC recently wrote an article about mini umbrella company fraud (MUC) – the latest non-compliant arrangement to damage the reputation of the umbrella company industry.

The Recruitment & Employment Confederation (REC) has called on HMRC to open a dedicated umbrella company hotline to help protect workers engaging with umbrella companies. The hotline would be run by HMRC and would provide quick, dependable advice to any worker or stakeholder in the temporary staffing supply chain who has any worries or questions about the actions undertaken by an umbrella company. It sounds like an excellent idea and one that Churchill Knight Umbrella fully supports.

Neil Carberry, the Chief Executive at REC, said the following about the dedicated umbrella company hotline and REC’s plans to protect workers:

“Recruiters want a robust and fair supply chain, where workers’ rights and pay are protected and all parties’ responsibilities are clear. Bad-faith umbrella companies have been allowed to thrive alongside compliant businesses for too long. An HMRC-run hotline for reporting bad practice by umbrellas would make it easier for workers to report abuses, and help government bodies to coordinate their efforts to stamp out bad practice. It is essential that the government regulates umbrella companies as a matter of urgency to protect both workers and recruitment agencies.

Of course, employment businesses also have a responsibility to make sure they operate with fairness and transparency, and for our part, the REC will continue to ensure our members do this. Workers should always know who they are employed by, and we worked with government on the introduction of the Key Information Document (KID) to ensure everyone has this information. We urge all recruiters to always conduct rigorous due diligence on their supply chains, and I have written to all our members with new guidance to help them do so – this is more important than ever right now.”

For years, REC has urged the government to regulate umbrella companies. With more stakeholders demanding the regulation of the industry than ever before, REC has unveiled a set of measures aimed at protecting workers and ensuring the supply chain remains compliant.

1. Introduce a dedicated umbrella company hotline, managed by HMRC. This will allow contractors, freelancers, agency workers and anybody in the supply chain to report malpractice and seek advice.
2. Request that HMRC releases a legal definition of what an umbrella company is. This will help provide clarity to the sector. It will also stop alternative payroll solutions from targeting vulnerable workers.
3. Provide additional guidance to workers to help them avoid unethical umbrella companies.
4. Acknowledge the REC Code of Professional Conduct – a series of compliance criteria created by REC. All of its members must adhere to them.

Churchill Knight Umbrella

Backed by professionals with over 20 years in the contractor payroll industry, Churchill Knight Umbrella is one of the fastest-growing umbrellas in the UK. We are committed to providing contractors, freelancers and temporary workers with a compliant PAYE payroll service, and we’re proud to be a member of the Freelancer and Contractor Services Association (FCSA). The FCSA is the UK’s leading professional body dedicated to ensuring the supply chain of temporary workers is compliant with HMRC’s rules and regulations.

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